The founder of electric and hydrogen truck business Nikola has insisted the group is “undervalued”, despite the revenue-less company overtaking Hyundai and Fiat Chrysler in value within days of listing its shares.
The value of the company, which joined the public markets last week through a merger with a non-trading listed business, hit $28bn on Tuesday, even though it has yet to sell a single vehicle.
Nikola, which was founded in 2016 and has ambitious spending plans, aims to start generating revenues next year when full production of its hydrogen-powered class 8 semi-trailer truck begins.
Its shares on Tuesday rose to $81, making the business worth $28bn, compared with Hyundai’s $26bn valuation and Fiat Chrysler’s $21bn. On Monday, it briefly overtook Ford’s $30bn valuation when shares touched $90.
The company, which merged with VectoIQ for the listing, intends to be profitable within “a year or two” of starting production, but founder Trevor Milton told the FT that its investors, which include ValueAct and Fidelity, had bought into a larger vision.
“These people [our investors] believe it’s more important to change the world than what your revenues are in the first year,” he said, adding the company “is undervalued right now” because of its potential to break into the highly lucrative pick-up truck segment.
His comments, and the company’s accelerating shares, will reignite debate over valuations of battery vehicle businesses that lag behind traditional auto manufacturers in profit and sales, but use social media to garner attention and build a fan base.
Nikola’s backdoor route to the stock market included raising more than $760m — three times what Tesla raised when it went public a decade ago. The group has also lost $188.5m over five years, according to filings.
It plans to begin production of its truck next year in Europe through a joint venture with CNH Industrial, the Italian group that owns the Iveco truck brand. It also holds a 7 per cent stake in Nikola.
Mr Milton said the business had 14,000 expressions of interest for its truck, or about six years’ worth of production.
He also stressed that he had “different views” to Elon Musk, the relentless Twitter-using Tesla CEO, including the company’s use of dealerships and its rollout of charging infrastructure.
He said that Tesla, which is valued at $175bn, could be worth “a trillion dollars” if it owned a traditional dealer network.
Nikola plans to build hydrogen filling stations on routes where it has received dedicated orders, unlike Tesla which rolled out a worldwide charging network far in advance of its sales, he said.
While electric technology is making inroads in passenger cars, the difficulties in fitting batteries to heavy goods vehicles means they are much further behind in electrification.
Many truckmakers are developing electric technology, but believe it is still a long away from commercialisation. Hydrogen fuel-cell systems that provide a longer range but need specialist refuelling stations are seen as a more viable option.
While Nikola plans to build “Class 8” long-haul trucks from next year, the prospective vehicle that has driven most attention is its “Badger” pick-up.
Although the vehicle is still under development, Mr Milton told investors in April that it would have a 600-mile range from both an electric battery and a fuel cell. A tweet on Monday announcing that pre-orders would begin on June 23 doubled the company’s shares during the day.
Nikola is in talks with three companies about building the vehicle, with an announcement later this year, Mr Milton said.
A pick-up would take the company into a ferociously profitable segment of the market, but pit it against not only established players such as Ford and General Motors but also new entrants such as Rivian.